This blog is written by a former Canada Revenue Agency (CRA) Employee of the Year who worked in, managed and trained CRA's Collections Department staff for almost 11-years. inTAXicating provides information, support and solutions for everything CRA related, including but not limited to; Collections, Enforcement, Audits, Liens, Back-Filing, Assessments, Director's Liability, s160 Assessments, Taxpayer Relief, Voluntary Disclosure, Bankruptcies, Proposals, Mortgages and diagnosing and solving the most complex of tax problems. Contact us for a free consultation! Should you need to hire us, you will find us to be Experienced, Honest and On Your Side. Email us at info@intaxicating.ca, and let's begin solving your tax problems together!

Tag: arrears

If you live in Southern Ontario, you are in the middle of a heat wave. Summer came back bigger, badder, stronger than it had all summer, and with humidex readings in the low 40’s, all the talk is about cooling off and extending the cottage season.

And there is nothing wrong with it.

But as the calendar creeps towards October, we enter the last quarter of the year and this is traditionally the best time of year to finally seek resolution on that nagging Canada Revenue Agency (CRA) tax problem.

The tax problem that causes you so much stress that you cannot open the brown envelopes from the CRA.

The tax problem which resulted in the CRA freezing your bank account or garnishing your wages.

That nagging tax issue which prompted the CRA to register a lien against your property.

The one that prevents you from having a full night’s sleep.

Yes, that one.

Well worry no more because help is here.

No matter how big, or small, complex or simple, we have seen them all, and resolved them all. At the very least, after a meeting with us, you will understand the truth behind your tax problem – whether you have a chance of having it overturned or whether you actually are on the hook for the balance.

After a meeting with us, you can finally start on the pathway to resolving your tax troubles and no longer worry that when you try to use your debit card it might not work because the CRA froze your bank account and withdrew all of the funds.

What Do Lionel Messi, Cristiano Ronaldo and Floyd Mayweather have in common aside from being top atheletes in their respective sports, and extreme wealth?

Tax Troubles!

Ronaldo and Messi with the Spanish Tax Authroity, and Mayweather with the IRS, which just goes to show you that no matter how much money you have, or don’t have, you still have to report income, file on time and pay your taxes!

In Ronaldo’s case, the Spanish Hacienda tax authority believes Ronaldo failed to pay €14.7 million in taxes pertaining to income earned on his “image rights” between 2011 and 2014. The belief is that he used (and still uses) a shell company in the British Virgin Islands and Ireland, to hide at least €78m in image rights.

Ronaldo’s camp claim that he has fulfilled all his tax obligations, maintaining that the majority of his image-rights income is earned abroad and therefore not liable for Spanish tax.

How does Ronaldo’s situation differ from Lionel Messi’s tax case?
Barcelona star Lionel Messi and his father Jorge were found guilty of tax fraud in July 2016 after it was found they had hidden image-rights income from the Spanish authorities. Messi was fined €3.6m and sentenced to 21 months in prison (which was suspended) for defrauding €4.1m between 2007-09.

The Messi family had previously paid over at least €10m in back taxes and charges, long before their case made it to court.

In Messi’s case, the court determined there was a total failure to fill his tax obligations on image rights income.

A huge concern stemming from the The Supreme Court’s judgement in the Messi surrounded the role that Messi’s tax and financial advisors played and how both parties were not indicted as part of the prosecution since they there was evidence that they advised the player on how to evade taxes.

In Spain, a guilty verdict for an aggravated tax crime means a mandatory jail time of two to six years, while conviction of the lesser offence brings a suspended sentence. If Ronaldo admits to the details in front of the judge within two months after being accused, and pays over the amounts allegedly defrauded, his punishment could be reduced.

Messi’s 21-month prison sentence for tax fraud was reduced to a €252,000 fine, while his father’s 15-month prison sentence was reduced to a €180,000 fine.

These fines are in addition to the re-payment of the taxes originally owing plus any penalties and interest accrued to the balance.

Floyd Mayweather, and his estimated net worth of $340 million is in trouble with the IRS and has apparently filed a petition asking for a temporary reprieve from unpaid taxes from 2015 until after his fight with Conor McGregor in August.

Apparently, while he has substantial assets, those assets are restricted and primarily illiquid. The upcoming fight against McGregor, however, would provide Mayweather with enough liquid cash to pay the IRS debt from 2015 in full.

Mayweather, made $220 million alone from his 2015 fight against Manny Pacquiao. It is unclear how much he owes the IRS in taxes. Given a 15-month lapse since the 2015 tax due date, Mayweather would owe 7.5% in penalties plus accruing interest on top of what he was already scheduled to pay.

Forbes estimated Mayweather’s net worth at $340 million in January.

So the moral of the story is this;

Not everyone wants to pay their taxes, and some will go to great lengths to reduce or avoid paying taxes. If that is something that you feel you must do, you have to be prepared for the consequences of your actions when and if the government comes back to you.

File on time.

Pay on time.

Don’t pay the government more than you should.

If you need help because you’re carrying a balance with the CRA and you want to discuss options, contact us today!

Just wanted to drop a quick note to all of you who called, emailed and hit me up on the blog or on social media that we’re back to work and trying to get to everyone as soon as possible.

If anyone has an urgent matter, please send an email to info@intaxicating.ca, in the subject line, please write “urgent” and that will be the top priority.

For new readers of this blog or who are seeing this blog through our website, here is what you need to know!

inTAXicating is a Canadian tax consulting business which provides solutions to Canadian Tax problems predominantly related to the Canada Revenue Agency (CRA), but not limited to the CRA.

With over 20-years experience in Canadian Tax (throw in some IRS tax, FATCA, Revenu Quebec, Cross-border matters and WSIB) combined with over 10-years working in the CRA in their collections division, you have the experience and expertise that no-one else can boast to have.

Our model is simple! Give you the truth based on the facts.

You get a free consultation and if it is determined that you can handle it best, or if your questions are quickly answered, then you are on your way.

If there are more complex matters which may eventually require greater expertise, then you have the option to handle you tax matters up to that point and then hand it over, or you may wish to hand it over right away…

It’s your taxes and you need to know what is being done and how to properly handle them going forward.

There are no magical cures for tax problems which took years and years to grow, so if anyone promises you a magic bullet, proceed with caution.

inTAXicating also believes that everyone who earns money needs to pay their taxes, however, they should pay what they owe, and in circumstances where there is no ability to pay, the government should understand that and give you a break.

No questions are bad questions.

I do not believe in the “natural person” being exempt from taxes because the CRA does not believe it, but I have spoken to many, many “de-taxers” and enjoy the conversations and helping them through the CRA’s prosecutions.

On November 21st, 2015, the Law Society of Upper Canada found Philippe DioGuardi, of DioGuardi Tax Law guilty of professional misconduct. As a result, Dioguardi has been given a six-week suspension, a $5,000 fine and an order to pay $75,000 in legal costs.

The law society’s application to the tribunal included allegations that DioGuardi took money from six clients before performing “any or very little legal service,” and in some cases “failed to perform legal services to the standard of a competent lawyer.”

DioGuardi also failed to file income tax returns for a client in a timely manner, the law society alleged in its application.

As part of the agreed-upon penalty, DioGuardi must submit to a review of his practice by the law society.

In its submissions, the law society charged that DioGuardi “failed to act with integrity” by having eight clients sign retainer agreements that benefited his law firm, DioGuardi Tax Law, to the “potential detriment” of those clients when he would deposit client retainer money into the firm’s general account, as opposed to a trust account, which gave DioGuardi ownership over client money prior to any work actually being done.

A law society bylaw states that client funds must be deposited in a trust account and can only be drawn once work is completed.

Earlier this year, DioGuardi was investigated by the Toronto Star relating to his personal and business practice stemming from a messy divorce and to address allegations that he overdrew his firm’s account by $2 million, and at one point owed the CRA more than $140,000 in arrears.

inTAXicating and The Canada Revenue Agency (CRA) would like to remind those taxpayers who are self-employed individuals (and their spouses or common-law partners) that the 2015 personal tax (T1) tax filing deadline is midnight on Monday, June 15, 2015.

If you had an outstanding balance for 2014, it would have had to be paid to the CRA on or before May 5th 2015, which is different from the normal April 30th deadline as a result of that extension granted by the CRA this year.

If you miss the deadline, you might be liable for a late-filing penalty (cumulative if you have been filing late in multiple consecutive years), and / or a late-filing penalty on amounts owing which applies to returns received after the June 15, 2015 deadline.

The CRA suggests you file electronically, using NETFILE , which allows you to file your individual income tax and benefit return over the Internet quickly and easily. For a list of software and web service options, including those that are free for everyone, go to http://www.netfile.gc.ca/software.

If you have a balance owing, you can make your payment using your financial institution’s telephone or Internet banking service. For more information about online payments, go to http://www.cra.gc.ca/payments or contact your financial institution, or search through the blog posts at inTAXicating.wordpress.com for a post on how to make payments to the CRA.

You can also pay using the pre-authorized debit online service offered through the CRA’s “My Account” feature. The pre-authorized debit allows you to:

Set up a payment to be made from your bank account to the CRA on a pre-set date

pay an overdue amount

make instalment payment

You can also make your payment using the CRA’s “My Payment” service. My Payment lets you make one or more payments in one simple online transaction. You can use this service if you have access to online banking at a participating financial institution.

You can also sign up for direct deposit to receive your refund in your account at your Canadian financial institution-no more waiting for a cheque to arrive in the mail, however as I have mentioned in many previous posts, signing up for this service provides the CRA with your banking information which is the first place they will try to seize if you ever have a balance owing to them.

Save time – go online!

The CRA’s online services make it faster and easier to handle your business’s tax matters. You, your employee, or your representative can file, pay, and access detailed information about your tax accounts-all online, all at your fingertips. To learn more about the CRA’s electronic services for businesses, go to http://www.cra.gc.ca/businessonline.

If you have questions or concerns regarding your taxes or a letter / notice you have received from the CRA, drop us an email at info@intaxicating.ca or intaxicatingtaxservices@gmail.com. Take advantage of our free consultation.

Former CRA employee fined and sentenced to 18-month conditional sentence for income tax evasion

Surrey, British Columbia. The Canada Revenue Agency (CRA) announced today that Maria Victoria Banhaw of Burnaby, British Columbia, was sentenced on October 3, 2014 in Vancouver Provincial Court, after pleading guilty to one count of income tax evasion. Banhaw was fined $47,580, representing 75% of the total federal income tax evaded. She was also ordered to serve an 18-month conditional sentence, which includes 9 months of house arrest.

A CRA investigation determined that Banhaw, while employed at the CRA, prepared and filed personal income tax returns for herself, her husband and 34 family members and friends for the 2005 to 2009 tax years. On these 96 returns, Banhaw overstated the amount of Registered Retirement Savings Plan (RRSP) contributions in order to reduce taxable income and increase refund amounts payable. Banhaw’s family and friends were unaware that she made false claims on their returns. In total, Banhaw reported $389,417 in false RRSP contributions, resulting in $63,438 in taxes evaded.

The preceding information was obtained from the court records.

When taxpayers are convicted of income tax evasion, in addition to any fines, they must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the CRA. In addition, the court has the ability to fine them up to 200% of the taxes evaded and impose a jail term of up to five years.

If you have ever made a tax mistake or omission it is prudent to speak to us right away so that we can help you understand where you stand in the eyes of the CRA. We will help you determine if you can handle it on your own – and set you up to do so, or recommend our services or the services of others to assist you through the process.

November 14th, 2014 is National Philanthropy Day here in Canada, and the Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, was in Vancouver to applaud those Canadians who donate to charities and to remind Canadians to take advantage of the tax credits available for eligible charitable donations.

Receiving special attention was the new temporary donor super tax credit which provides an extra 25% federal tax credit on top of the original charitable donation tax credit which means that eligible first-time donors can get a 40% federal tax credit for monetary donations of $200 or less, and a 54% federal tax credit for the portion of donations that are over $200 up to a maximum of $1,000.

The donor super credit applies to donations made after March 20, 2013, and can only be claimed once between 2013 and 2017.

This is in addition to the provincial credits available.

Those who have donated before can still be eligible for the charitable donation tax credit, a non-refundable tax credit which allows taxpayers to claim eligible amounts of gifts to a limit of 75% of their net income.

For a quick estimate of your charitable tax credit for the current tax year, try the charitable donation tax credit calculator, which can be found here.

Minister Findlay also reminded Canadians that only Canadian registered charities and other qualified donees can issue official donation tax receipts. This is extremely important because if you make a donation to a charity which is not eligible to issue donation tax receipts but they provide one anyways, the CRA will re-assess you for that donation deduction with penalties and interest. A little due diligence up front goes a very long way.

If it seems too good to be true, it should give you reason for concern…

To find out if an organization is registered, go to the Canada Revenue Agency’s (CRA) website and search their complete list of registered charities in their Charities Listings.

For more information about donating, such as how to calculate and claim the charitable tax credit, go to the CRA’s site for making donations, which is here.

Some Quick Facts

Two years ago, Canada became the first country in the world to officially recognize November 15 as National Philanthropy Day.

There are more than 85,000 registered charities in Canada.

The benefit to charities of being a registered charity? Registration provides charities with exemption from income tax.

According to Statistics Canada, in 2010 almost half of all Canadians volunteered, giving more than two billion hours of their time. In addition, in 2012, 5.6 million tax filers reported charitable donations for a total of $8.3 billion in donations reported.

According to Statistics Canada, in 2012 the average age of charitable donors across the provinces and territories is 53 years old.

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About inTAXicating

This is the blog for inTAXicating.ca

inTAXicating was created by Warren Orlans, a Canadian Tax Consultant and former Canada Revenue Agency (CRA) Employee of the Year who worked in the CRA for almost 11-years in their Collections Department.

inTAXicating provides expertise in the area of Tax Liability Solutions and assisting Canadians to understand how the CRA operates.

In order to provide you with the best Tax Solution services possible, we work with Mortgage Brokers. Tax Lawyers, Accountants, Bookkeepers and Insolvency Practitioners to ensure that you get the best experience during a difficult time as you fix your tax problems.